Returns on Investment in Workplace Wellbeing Programs

Presented by:Jeremy W. Bray, PhDDepartment of Economics

Bryan School of Business and EconomicsThe University of North Carolina at Greensboro

Georgia Karuntzos, PhDJesse Hinde

RTI International

Context

• Many researchers and program developers think workplace stakeholders require that wellbeing programs bring positive economic benefits to the workplace– While documenting economic benefits is a necessary part of the

adoption decision process for most workplaces, these benefits by themselves will seldom convince a workplace to adopt a program

– The economic benefit needed to support adoption of wellbeing programs by any given organization is critically dependent on the context and needs of each organization

• Concerns about overstating the economic benefits of workplace wellbeing efforts have generated a growing backlash among some commentators

Outline of Presentation

• The return on investment (ROI) potential: brief overview of the cost to employers of poor worker health

• The ROI evidence: the I, the R, and the ROI• An alternative approach: cost-effectiveness

analysis (CEA)

Costs of Poor Worker Health

Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker HealthTM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.

Opportunity For Savings

Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker HealthTM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.

Benefits of Workplace WellbeingTo the organization To the employee

a well-managed health and safety programme a safe and healthy work environment

a positive and caring image enhanced self-esteem

improved staff morale reduced stress

reduced staff turnover improved morale

reduced absenteeism increased job satisfaction

increased productivity increased skills for health protection

reduced health care/insurance costs improved health

reduced risk of fines and litigation improved sense of well-being

Source: http://www.who.int/occupational_health/topics/workplace/en/index1.html

The I

• Cost studies document the service delivery costs of workplace wellbeing programs

• Often misunderstood due to varying use of the term “cost”– Cost of the problem (lost productivity due to poor health)– Micro-costing studies of program costs

• To date, formal micro-costing-based cost studies are almost nonexistent in the workplace wellbeing literature

• Cost studies from the Work, Family, and Health Network (Barbosa et al., 2014; Dowd et al., 2015)

Work, Family, and Health Network (WFHN)

• Six teams of investigators conducting research in diverse workplaces

• Interdisciplinary across social, behavioral, and health sciences

• Two US partner employers– Telecommunications firm (Tomo)– Healthcare/long term care firm (Leef)

• Phase I: 2005-2008• Phase II: 2009-2015

WFHN Goals

• Conduct interdisciplinary evidence-based research in the area of work and family programs and policies to reduce work family conflict

• Introduce health and wellbeing as the primary outcomes of interest in this area of research

• Improve the health of workers, their families and employers by providing the scientific evidence necessary to effect change in the workplace

WFHN Funding• Eunice Kennedy Shriver National Institute of Child Health and

Human Development (Grants # U01HD051217, U01HD051218, U01HD051256, U01HD051276)

• National Institute on Aging (Grant # U01AG027669)• Office of Behavioral and Social Sciences Research• National Institute for Occupational Safety and Health (Grants #

U01OH008788, U01HD059773)• Additional funding from

– National Heart, Lung, and Blood Institute (Grant #R01HL107240)– William T. Grant Foundation– Alfred P. Sloan Foundation– US Department of Health and Human Services Administration for Children

and Families

Source: Barbosa, C, Bray, J, Brockwood, K, & Reeves, D. (2013). Costs of a Work-Family Intervention: Evidence From the Work, Family, and Health Network. American Journal of Health Promotion, 28(4): 209-217.

WFHN Intervention Costs in Tomo

WFHN Intervention Costs in LeefCategory Cost Type Resource(s) Cost (2011$)

Customization      

  Labor 146 hours 4,449

  Non-labor - 0

  Total - 4,449

Start-up      

  Labor 300 hours 11,381

  Non-labor Participatory session contract, software licenses, iPods, travel 349,864

  Total - 361,245

Implementation      

  Labor 1,956 hours 47,466

  Non-labor Office space, handout materials 4,675

  Total - 52,140

Total cost of START 417,834

Total cost of START per participant (n=545) 767

Source: Dowd, W.N., Bray, J.W., Barbosa, C., Brockwood, K., Kaiser, D., Mills, M., Hurtado, D.A., Wipfl, B. (2015). Cost and Return on Investment of a Work-Family Intervention in the Extended Care Industry: Evidence from the Work, Family, and Health Network.

The R

• Numerous studies have demonstrated the effectiveness of workplace wellness/wellbeing programs on the target health behavior

• Studies also show effectiveness on workplace outcomes (e.g., productivity)

Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker Health TM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.

Source: NIOSH [2012]. Research Compendium: The NIOSH Total Worker Health TM Program: Seminal Research Papers 2012. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control and Prevention, National Institute for Occupational Safety and Health, DHHS (NIOSH) Publication No. 2012-146, 2012 May:1-214.

The ROI

• Meta-analyses (e.g., Chapman, 2005; Goetzel et al., 1999) suggest that workplace wellness programs save $3 for every $1 invested

• Despite this evidence, many doubts remain (National Institute for Health Care Management, 2011; DiNardo, Horwitz, & Kelly, 2013; Horwitz, Kelly, & DiNardo, 2013)

The ROI

“Three years after wellness was hailed as perhaps the only truly bipartisan component of the Affordable Care Act, both lay and trade commentators have begun observing that the assumptions behind it were incorrect while downsides were overlooked. As a predictable result, savings have proven elusive even in seemingly ideal baseline circumstances for health improvement.” – Al Lewis and Vik Khanna in the Health Affairs Blog, April 29, 2013

The ROI

Source: Caloyeras, J. P., Liu, H., Exum, E., Broderick, M., & Mattke, S. (2014). Managing manifest diseases, but not health risks, saved PepsiCo money over seven years. Health Affairs, 33(1), 124-131.

WFHN ROI in TomoCovariate Organizational Costs Intervention Costs

STAR participant -2,187.78 690.77***(4,207.03) (14.60)

Baseline costs to employer 2.08***(0.37)

Male 1,410.45 -17.36(3,537.30) (12.26)

Age -799.06*** 3.32**(196.27) (0.97)

Race: Indian 16,595.36* -17.79(6,572.22) (19.72)

Race: Non-white, non-Indian -376.71 -33.289(4,169.645) (17.02)

College graduate 272.09 9.64(2,592.68) (18.10)

Constant 80,198.54*** -72.44(21,140.43) (61.73)

ROI2.17

(4.85)

N=960; * p<0.05, ** p<0.01, *** p<0.001 Dependent variables expressed in U.S. dollars, 2011 prices; cluster-robust standard errors in parentheses. ROI standard error calculated using a cluster-robust bootstrap routine with 1,000 replications.Source: Barbosa, C., Bray, J.W., Dowd, W.N., Mills, M.J., Kelly, E.L., Moen, P., & Wipfli, B. (2015). Return on investment of a Work-Family Intervention: Evidence from the Work, Family, and Health Network. Journal of Occupational and Environmental Medicine. 57(9): 943–951.

WFHN ROI in LeefAdjusted Means‡

Control 9,965.18

(787.67)

STAR 10,345.57

(634.89)ROI§

Point Estimate -1.54Confidence Interval -4.90 – 2.49

U.S. dollars, 2011 prices.‡Adjusted means (standard errors) computed using recycled predictions.§ROI calculated as (∆E-C)/C, where ∆E is the marginal effect of STAR on organizational costs and C is the average intervention cost. Confidence intervals calculated using a cluster-robust bootstrap routine with 1,000 replications.

Source: Dowd, W.N., Bray, J.W., Barbosa, C., Brockwood, K., Kaiser, D., Mills, M., Hurtado, D.A., Wipfl, B. (2015). Cost and Return on Investment of a Work-Family Intervention in the Extended Care Industry: Evidence from the Work, Family, and Health Network.

An Alternative Approach: CEA

• Looks at value for money using the incremental cost effectiveness ratio (ICER)

• Helps chose among alternatives assuming something will be adopted, but does not give information on whether or not to adopt

• Different outcomes may have different effectiveness so that one program may not be cost-effective for all outcomes

European Wellness CEAs

• Nutrition and exercise (Robroek et al., 2012)• Cardiovascular disease prevention (Groeneveld

et al., 2011)• Depression (Phillips et al., 2013)• CEAs of interventions for musculoskeletal

disorders in reducing absenteeism are now so prolific that three separate systematic reviews have been published since 2010 (Carroll et al., 2010; Palmer et al., 2012; Squires et al. 2012)

Parting Thoughts

• Competing stakeholders and perspectives– Industry– Employee– Government

• Research is needed– Need more quality evaluations of workplace

wellbeing programs– Need better quality research on cost savings and

ROI

Questions?